Uncategorized

RBI lifts ban on new biz for Diners Club


MUMBAI: The Reserve Bank of India (RBI) said on Tuesday that it has lifted the restriction on Diners Club International from on-boarding new domestic customers. Diners Club, which is owned by Discover Financial Services, issues cards in India through a partnership with HDFC Bank. The RBI had barred Diners Club from on-boarding new customers from May 1, through an order dated April 23. The ban followed the card network’s failure to comply with the central bank’s order/norms pertaining to data localisation. In terms of these norms, RBI-regulated entities have to store data pertaining to Indian customers on Indian soil. They can send the data overseas for processing, but the same has to deleted within 24 hours and the process certified. Besides Diners Club, the RBI had also barred American Express Bank from on-boarding new customers. Subsequently, the ban was extended to Mastercard. Although the payment giant had confirmed that it would comply with the central bank’s guidelines, the RBI decided to issue the order as it failed to meet the extended timelines. While Diners Club and Mastercard are network providers, American Express has a banking licence which it uses only for issuing cards. Amex, besides issuing cards, also acquires merchants and provides the payment network. The ban on Mastercard and Diners Club had given a boost to Visa’s card issuance. Visa, already the largest credit card network, has been the biggest gainer from the ban on Mastercard as many issuers who had exclusive arrangements with Mastercard shifted to its rival. HDFC Bank, which issued over five lakh cards in less than six weeks, is understood to have issued most on the Visa platform.


Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
%d bloggers like this: